Status of Mingo plant still unsettled

December 20, 2012

MINGO JUNCTION - With the $115 million electric arc furnace and several modern pieces of equipment in place, local steelworkers still hope to restart the large plant that once wore the Wheeling-Pittsburgh Steel badge.

"We steelworkers are ready to to do our part to make this work. Just give us a chance - that is all we ask," said Ernie Gambellin, the most recent president of United Steelworkers Local 1190. "This is important for Mingo, and for the whole Ohio Valley."

Due to RG Steel's bankruptcy this year, Buffalo, N.Y.-based Frontier Industrial purchased the entire facility, including its electric arc furnace, for $20 million. Craig Slater, general counsel and vice president for Frontier, said his company is still working to find investors to help restart the mill. He said this would probably take about $80 million and about six months of work.

"We have not given up on anything. We continue to have discussions, many of which have been encouraging," Slater said.

While the Mingo plant sits idle as it has since 2009, portions of the large RG Steel plant in Sparrows Point, Md., are now about to be demolished and sold for parts.

"Steelmaking at Sparrows Point has been a major part of Maryland's economy for more than a century, providing and supporting well-paying jobs for generations. We were hopeful that the plant would remain a viable steelmaking operation. We are confident that the dedicated steelworkers of Sparrows Point will transition to new jobs and continue to play an important role in our economy," said Maryland Gov. Martin O'Malley regarding the plans to demolish the steel facility.

However, both Gambellin and Slater said this does not have to be the destiny of the Mingo plant. Although Frontier's website states that it specializes in "demolition" and "industrial gutting," Slater said his crews have removed some "stuff" from the Mingo mill, but nothing vital to the steelmaking process.

"This is a great plant with a lot of great assets. We would love to see it restart, but we cannot do it alone," Slater said.

Realizing one of the main costs associated with running a plant is energy, Slater said there have been some discussions with the Public Utilities Commission of Ohio in hopes that Frontier could receive discounts on energy supplies.

"We have had good, interesting discussions with a number of people to try to get this going," he added.

Gambellin emphasized that he is holding out hope for a restart at Mingo - until Slater gives him a reason to believe something else.

"Unlike Sparrows Point, we have not been told that we are going to be dismantled. We still have a shot with this. He is holding the cards right now," Gambellin said of Slater.

As the final destiny for the Mingo facility is yet to be determined, Esmark Inc. and USW Local 1223 have reached a four-year agreement to get the former RG Yorkville mill going in the first half of 2013. However, the average worker wage in the Esmark deal is $21.64 per hour, down from about $26 per hour under the last RG agreement for the Yorkville plant, according to Local 1223 President Jerry Conners.

And while he did not want to nail down a number, Gambellin said steelworkers in Mingo realize they may have to work for less than in previous years.

"We know we cannot have companies coming in here and going bankrupt. We need someone who is going to be in this for the long haul," he said.

After nearly four years of inactivity at Mingo, Gambellin said some displaced workers have retired, while others have gone to college or left the area in search of new careers. He said there are about 500 people in place now who are still looking to return to work.

"We still have a pretty modern mill that we feel we can make profitable. Again, all we ask for is a chance," Gambellin added.

Esmark previously owned all the former Wheeling-Pitt facilities before selling them to Russian steelmaker OAO Severstal for $1.23 billion in July 2008. Severstal, after idling the Steubenville and Mingo plants in 2009, later sold these plants to RG. That company liquidated its assets after filing for bankruptcy this year.

Records show that Wheeling businessman Quay Mull purchased the Martins Ferry RG mill. Efforts to reach Mull have been unsuccessful. RG also has sold the idled Steubenville plant to a subsidiary of Herman Strauss Inc., a Wheeling-based recycling business. Strauss paid $4.3 million for about 103 acres, plus another $10.7 million for the scrap and machinery.